Microsoft will sell a version of its Xbox 360 with a 120-gigabyte hard drive and a souped up high-definition video connection, in a bid to broaden the appeal of its popular console beyond video games.
Earlier versions of Xbox 360 came with 20 gigabytes of storage. But that filled up too quickly with movies, TV shows and games from the Xbox Live Marketplace online store, said Peter Moore, a corporate vice president in Microsoft's Interactive Entertainment group.
The new Xbox 360 Elite will sell for $479.99. Consumers who already own the $399.99 20-gigabyte model will be able to buy a snap-on 120-gigabyte hard drive for $179.99. Both the new console and the drive are expected to hit U.S. shelves April 29.
Microsoft also added an HDMI connection, which sends high-definition content from the console to the TV without losing picture or sound quality, while also helping prevent piracy.
Xbox 360 was the No. 2 U.S. video game console after Nintendo's Wii in January and February, according to data from market researcher NPD Group. The Xbox outpaced Sony's PlayStation 3, a $599.99 console that plays Blu-ray DVDs.
Microsoft's decision to upgrade the Xbox 360 is the latest of many steps the software maker has taken to position its products at the center of home entertainment.
Microsoft has incorporated Media Center software, which can turn a computer into a digital video recorder, movie and music player, into all but the most basic version of its new Windows Vista operating system.